HOUSING SUPPLY: A TEN YEAR RETROSPECTIVE
Over the course of the last ten years, we have witnessed notable changes in housing supply. One key aspect to consider is planning approvals, which have seen fluctuations throughout this period. According to recent statistics, there has been a steady decline in major residential approvals across the country since the peak of 6,617 in 2017. As of now, we stand at 4,221 major residential approvals, marking the lowest figure in the past ten years. This decline suggests a potential slowdown in the development of large-scale residential projects.
However, it's not all gloom and doom. On a positive note, the number of completed new homes has reached a 10-year high. With over 177,000 homes completed in the last 12 months, it's evident that we are benefitting from the peak of residential approvals between 2017 and 2019. This surge in completed homes showcases the progress made in delivering housing to meet demand.
A deeper examination of the data reveals interesting insights. Research conducted by Lichfields in 2020 found that developments of over 500 homes can take an average of 3 years to begin completions. Similarly, schemes of 200+ homes can take an average of 8.4 years. These figures emphasize the extended timescales involved in the development process. Therefore, the effects of the peak in residential approvals between 2017 and 2019 will continue to shape the housing market in the immediate future.
Another aspect worth considering is the relationship between housing supply and house prices. Over the past ten years, average house prices have steadily risen, seemingly unaffected by the residential planning pipeline. This suggests that other factors, such as demand and market dynamics, have had a more significant influence on house prices during this period.
In conclusion, reflecting on the past ten years provides valuable insights into the changing landscape of housing supply in the UK. While major residential approvals have experienced a decline, the number of completed new homes has reached a 10-year high. These trends highlight the importance of monitoring planning approvals, construction timelines, and market dynamics to ensure a sustainable supply of housing. By understanding the past, we can better navigate the future and address the ongoing challenges in meeting housing demands.
Source: Dataloft, DLUHC (2023), Land Registry (2023), Lichfields (2020)
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